Massachusetts Military Filing Information
Are Military Personnel Required to File?
If you enlisted in the service as a Massachusetts resident and have not established a new domicile (legal residence) elsewhere (refer to military guidelines), and if your gross income is more than $8,000, you are required to file a Massachusetts resident income tax return. This applies even though you may be stationed outside of Massachusetts. The terms “legal residence” and “domicile” are used to denote that place where you have your permanent home and to which, whenever you are absent, you have the intention of returning. Nonresident military personnel stationed in Massachusetts may be subject to Massachusetts taxes and should file Form 1-NR/PY if they earn income from outside military sources.
The following example illustrates circumstances under which military pay is or is not taxable in Massachusetts. No guidance is intended on the tax treatment of such pay under the laws of other states. Generally, when income is taxable in two jurisdictions, a credit for taxes paid to the other jurisdiction is allowed on the taxpayer’s return in the state of his/her residence.
Example: Betsy enlisted in the Navy in Massachusetts, but moved with her husband, Eric, from Massachusetts to Delaware when she was stationed there. They did not change their domicile to Delaware. She received military income while her husband received income working as a reporter for a local newspaper.
Betsy’s income from the Navy, as well as her husband’s income from the newspaper, are both subject to Massachusetts income tax since she enlisted in the Navy in Massachusetts and they did not become legal residents of Delaware. Betsy and her husband are, therefore, Massachusetts residents, and any income they receive, whether derived in Massachusetts or not, is included in their Massachusetts gross income.
Combat Zone Pay:
Compensation earned by members of the armed forces for service in a combat zone is excluded to the same extent under federal law.
Military Spouses Residency Relief Act:
On November 11, 2009, the Military Spouses Residency Relief Act (P.L. 111-97) was enacted.
1. Prohibits a servicemember’s spouse from either losing or acquiring a residence or domicile if such absence or presence in any U.S. tax jurisdiction is solely:
A: to be with the servicemember; and
B: is in compliance with his or her military orders if the residence or domicile is the same for the servicemember and the spouse.
2. Stipulates that income for services performed by the spouse of a servicemember shall not be deemed to be income for services performed or from sources within a tax jurisdiction of the United States if:
A: the spouse is not a resident or domiciliary of the jurisdiction in which the income is earned because the spouse is in the jurisdiction solely to be with the servicemember serving in compliance with military orders.
Military Spouse Wage Withholding - Filing for Refund:
A service member's spouse who has Massachusetts personal income tax withheld, who qualifies for exemption from Massachusetts tax, but did not submit a Form M-4 MS must file a Form 1-NR/PY Massachusetts Nonresident Income Tax Return, to claim a refund. For this purpose, the Form 1 NR/PY return must be paper filed; no e-file returns are allowed. The qualifying spouse must write "MSRRA," across the top of the Form 1 NR/PY and attach copies of the following:
1. Military Spouse ID card.
2. Department of Defense Form 2058, State of Legal Residence Certificate – "legal residence for purposes of withholding state income taxes from military pay;"
3. LES, Leave and Earnings Statement of service member; and
4. Service member's current military orders assigning such service member to a post of duty in or near Massachusetts.
The qualifying service member's spouse must pay tax to the state of domicile to the extent required by the state of domicile.
For additional information regarding military spouses, please click here.
For a copy of exemption to withholding please click Form M-4 MS.
Extension of Time for Filing:
DOR follows the federal rules for granting an extension of time to file income tax returns and to pay taxes due for those serving in a combat zone, or hospitalized as a result of such service, during the period designated as the period of combatant activities. This extension applies to members of the armed forces, as well as individuals serving in support of the armed forces, serving in a combat zone. The extension period is for the time of service in the combat zone area or hospitalization attributable to such service plus 180 days. Additional detailed information can be found in TIR 04-05.
No interest or penalties will be charged during the extension period on taxes due for the tax year. The extension of time to file returns also applies to spouses of personnel serving in combat areas if a joint return is filed. Taxpayers claiming an extension of time to file a return or pay tax under this provision of law should write "COMBAT ZONE" on the income tax envelope and on the top of the income tax return that they submit to the Department of Revenue. If filing electronically, taxpayers should write "COMBAT ZONE" next to their name, or if necessary, on one of the address lines on the form, along with the date of deployment.
Additional information is available in the Form 1 and Form 1-NR/PY Instructions.
A more in-depth explanation is available in the When is a Return Due section of the Guide to Taxes.
Massachusetts Military Family Relief Fund:
The Massachusetts Military Family Relief Fund Is administered by the Friends of Massachusetts National Guard and Reserve Families. Contributions to this fund are used to help members of the Massachusetts National Guard and Massachusetts residents who are members of the reserves of the armed forces of the United States and who have been called to active duty after the September 11, 2001 terrorist attacks, and their families, to defray the costs of food, housing, utilities, medical services, and other expenses.